JCPenney warns: Losses are growing
Posted October 27, 2017 8:22 a.m. EDT
NEW YORK (CNNMoney) — JCPenney says it will lose twice as much money as it had expected to this quarter.
The retailer now forecasts a loss of between 40 cents to 45 cents a share, more than twice as bad as both Wall Street estimates as well as the $62 million, or 20 cents a share, that it lost in the second quarter. The warning sent JCPenney shares 14% lower Friday morning.
Driving the bigger loss, the company said, is its decision to speed up the liquidation of poorly-selling inventory, primarily women's clothing. CEO Marvin Ellison said the chain has already boosted sales but getting rid of less popular items.
Penney has lost $242 million in the first six months of this fiscal year. And while it did manage to post a narrow $1 million profit last year, that came after a string of five straight losing years in which it lost a total of $3.5 billion.
The chain also closed 127 stores during the second quarter, more than 10% of its locations.
Of course JCPenney is hardly the only brick-and-mortar retailer that's struggling. Store closing announcements have more than tripled this year, according to Fung Global Retail & Technology, a retail research firm. The total of 6,700 tops the previous record set in 2008, the first year of the Great Recession.